The mortgage industry is having growing concerns about a payroll tax relief measure that would raise GSE guarantee fees by 12.5 basis points, using the additional revenues to pay for other government programs.
The text of a bill sponsored by Sen. Bob Casey, D-Pa., dictates that the revenues generated by the g-fee increase will be deposited in the U.S. Treasury.
Moreover, the higher g-fees charged by Fannie Mae and Freddie Mac cannot be used to reimburse the “federal government for the costs or subsidy provided to an enterprise,” according to the bill. (Fannie and Freddie are known as government-sponsored enterprises.)
This siphoning of g-fees to pay for tax extensions is raising concerns among mortgage and housing industry officials.
“The National Association of Realtors is opposed to this provision and we have raised our concerns with members of Congress about the revenue being used to fund programs outside of housing,” a NAR spokeswoman said.
Rob Zimmer, who represents the Community Mortgage Lenders of America in Washington, noted that the mortgage industry is prepared to accept higher guarantee fees that accurately reflect the actual risk of the mortgages. “It is not ready to entertain higher prices just to fund unrelated parts of the federal budget,” Zimmer said.
The Housing Policy Council also is concerned about the diversion of mortgage g-fees. “We do not believe it is good policy to divert the guarantee fees to pay for other federal programs,” said HPC vice president Paul Leonard. HPC is part of the Financial Services Roundtable.
The increase in the g-fee is projected to raise $38 billion over 10 years. The Casey bill also uses a surtax on millionaires to offset the cost of the one-year extension of the payroll tax holiday.
Senate Democratic leaders are threatening to keep Congress in session through the Christmas holiday if Republicans continue to block what the Democrats call a “middle-class tax cut.”
Daily Briefing | Wednesday, December 7, 2011
HARP Refis on the Rise in 3Q
Servicers refinanced more than 85,000 high LTV loans under the Home Affordable Refinancing Program in the third quarter, up nearly 11% from the prior period, according to new figures compiled by the Federal Housing Finance Agency.
Purchase, Refi Apps Spike
Application volume increased by 12.8% on a seasonally adjusted basis for the week ended Dec. 2, as rates fell to their lowest levels in two months.
CS: Latest 30-Year Agency Prepay Speeds Rise 3%
Agency prepayment speeds came in line with expectations in the 30-year sector, where they were up 3% from the previous month, according to Credit Suisse’s fixed income research report Wednesday.
Thrifts See Originations Rise, But Market Share Paltry
Federally chartered thrifts originated $25.9 billion of single-family loans during the third quarter, up nearly 9% from 2Q, according to figures compiled by the Office of the Comptroller of the Currency.
Citigroup to Cut 4,500 Full-Timers, But No Details Provided
Citigroup Inc. has started job cuts this quarter that will affect nearly 4,500 people, chief executive Vikram Pandit said on Tuesday.
GAO: REO Poses Huge Strain on Banks, Local Governments
According to a Government Accountability Office report, while banks “are not properly maintaining” the growing number of vacant and foreclosed properties nationwide, resources required to demolish the large number of long-term vacant properties have exceeded local budgets.
Investors Account for 40% of REO Deals
Remember when “investor” was a four-letter word? Not anymore. Now, investors are all but saving the housing market.
Florida Realtors See Mini-Recovery
Even though foreclosures and distressed properties will remain a significant part of the home sales market in Florida next year, plus the macro economic headwinds, economists cited by the state’s Realtors said the market is in “a mini-recovery.”
Executive Team for Stewart Information Services
Matt Morris, who was recently appointed as chief executive of Stewart Information Services Corp., Houston, has created an executive team at the company.
Nevada, California AG’s Form Mortgage Fraud Investigation Alliance
The Attorneys General of California and Nevada are combining their investigative forces to combat misconduct and fraud within the mortgage industry against state homeowners.
Connecticut Mortgage Firm Gets Another License Approval
Total Mortgage Services, Milford, Conn., said it has received regulatory approvals to fund residential loans in West Virginia.
CFPB Battle Looms Over Dodd-Frank Hearing
Although a Senate Banking Committee hearing on Tuesday featured testimony from top officials at six different financial regulators, it was an agency not in the room that drew the most attention.